The Role of Wage and Skill Differences in Us-German Employment Differences

34 Pages Posted: 5 May 2000 Last revised: 17 Apr 2022

See all articles by Richard B. Freeman

Richard B. Freeman

National Bureau of Economic Research (NBER); University of Edinburgh - School of Social and Political Studies; Harvard University; London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP)

Ronald Schettkat

University of Wuppertal - Department of Economics

Date Written: January 2000

Abstract

Greater job creation in the US than in Germany has often been related to greater wage dispersion coupled with less regulated labour and product markets in the US. Based on the Comparative German American Structural Database and the International Adult Literacy Survey we find that employment of skilled to unskilled labour is unrelated to differences in skill premium but that changes in relative employment are related to changes in relative wages raising the possibility of some substitution behavior. Still, the differing dispersion of wages is not a major contributor to differences in employment rates. The jobs problem in Germany is one of a general lack in demand for labor.

Suggested Citation

Freeman, Richard B. and Schettkat, Ronald, The Role of Wage and Skill Differences in Us-German Employment Differences (January 2000). NBER Working Paper No. w7474, Available at SSRN: https://ssrn.com/abstract=213188

Richard B. Freeman (Contact Author)

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Ronald Schettkat

University of Wuppertal - Department of Economics ( email )

42097 Wuppertal
Germany

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